Mediterranean Investments Holdings register €49 million net profit for 2012

In its Director's Report, Mediterranean Investments Holdings plc announced a profit after tax amounting to €49 million.

This represents a considerable leap ahead from 2011 , when it registered a loss of €2.7 million.

In its report, the group directors noted that the result includes a fair value uplift recognised on the Palm City Residences amounting to €56.8 million and a corresponding deferred tax provision amounting to €20.7 million with a net effect of €36.1 million on the said results.

The residual difference of the profit after tax amounts to €12.9 million.

"This is a significant improvement in performance when compared to the corresponding period last year and is a result of the increased income generated from the leasing out of units at Palm City Residences."

The report also announced that the groups' asset base grew to €346 million as at 31 December 2012 from €291 million at the end of 2011, which resulted mainly from the fair value gain on Palm City Residences and the profit after tax realised on the operation of its subsidiary company, Palm City Ltd.

Mediterranean Investments Holdings plc., which is comprised of subsidiaries Palm City Lid and Palm Waterfront Ltd, and associate Media Tower Joint Stock Company for Real Estate Investment and Development.

"Throughout 2012 the company remained focused on two principal aims," the directors said.

The first was to re-organise and re-deploy a management and operations team to ramp up the facilities management team together with all the necessary resources after the ill effects of the 2011 civil uprising in Libya, and re-establish Palm City Residences as the leading provider of high-end residential properties for rent in the Libyan market.

The second company was to push forward on the commencement of the construction of the Medina Towers project in Tripoli, Libya.

In the report, the directors were "particularly pleased to report that there was a significant increase in signed lease agreements at Palm City Residences and that for the period under review 91% occupancy had been achieved at year's end."

"The actual occupancy, spread across various residential term contracts, also reveals a significant decrease in reliance on short-term rentals, which featured prominently at the end of 2011."

According to the report, the Oil and Gas Sector made up the largest portion of the actual occupancy rate (46% effective tenancy), followed by NGOs (275), Embassies (95), Banking Institutions (4%), and Airlines (3%), with the remaining 11% spread across Hospitality, Beverage and Construction, among others.

"The persistent and fast growing demand from the Oil and Gas Sector will be progressively met during the course of the ensuring years, as the presence of NGOs starts to decline."

In the report, the directors also acknowledged that the presence of NGOs at Palm City has "so far been considered as a short-to-medium term transient trade. That said, the extended presence of NGOs has actually contributed, in no small way, to the group's success over the past financial year."

"The directors believe that the ensuing shirt from medium to longer-term tenancy will offer added stability and further develop market position."

The report also notes that given the 2011 civil uprising, and its resulting impact on the company's cash flow, "the shareholders of MIH supported this temporary gap in cash flow by extending to the company 13.2 million by of shareholders' loans in 2011."

The directors said "this was necessary principally for the company to meet its bond interest costs and for Palm City Ltd to meet its commitments with capital creditors."